Iowa Economic Development Authority awards $1.85 million toward Collins Aerospace’s microchip expansion

CEDAR RAPIDS — Collins Aerospace — the city’s largest employer — was awarded $1.85 million in state financial incentives toward its proposed $22 million expansion of its northeast Cedar Rapids campus to begin the production of microchips.

The Iowa Economic Development Authority board on Friday approved the incentives toward the project for Collins, a division of Raytheon Technologies, to renovate an existing building on its campus between Collins Road and Blairs Ferry Road NE.

State incentives include a $1.54 million investment tax credit and refund of $285,000 in sales, use and service taxes paid during construction.

This award supplements the local match the Cedar Rapids City Council approved on Tuesday — $1.05 million in tax incentives.

The project calls for modernizing Collins’ facility and environmental controls for safe chemical storage/handling, water treatment and associated equipment and furnishings with a “class 100 clean room” — a manufacturing structure that uses HEPA filtration systems to keep the air clean.

The company will use the building to develop and manufacture microelectronic — microchip — technologies for Collins Aerospace communications products, with production expected to grow, city Economic Development Manager Caleb Mason said Tuesday.

Under the deal points approved by council, the company would renovate an existing 20,000-square-foot manufacturing building to create a 5,000-square-foot plating area, additional lab support and office space and a 6,000-square-foot class 100 clean room.

Of the $22 million minimum investment, $9.5 million would go toward the renovation and build out of the facility, and $12.5 million would go toward machinery and equipment.

Work would begin in April and finish by January 2026.

The Cedar Rapids-based company currently employs 7,816 people in Iowa, according to the IEDA.

To receive financial incentives, the company must keep 25 existing employees and create no fewer than 16 additional full-time employees. At least 41 employees have to be paid at or above the high-quality jobs wage threshold of $25.20 an hour — generally in engineering and technical positions that pay well above that amount, Mason said.

The city will provide three consecutive yearly payments of $350,000 economic development grants starting in August 2025 through August 2027. Those grants will be funded from the Collins tax increment financing district.

Those three grants were consolidated to be awarded before the TIF district expires.

“I don't think we can underestimate the importance of these type of employers that are engaged in high-tech products, and having them in Cedar Rapids pays big dividends in the long run,” council member Scott Overland said Tuesday.

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